09 October 2003
Study of the Literature to Assess the Future of India's Shipbuilding Industry
By Howard M. Bunch, University of Michigan, 7/6/2003
Several industrial sectors within India are at the cutting edge of technology, and world class in their sector capabilities. Sadly, the shipbuilding industry is not one of these sectors at the moment. It is uncompetitive in cost and in delivery time, and most of the major shipyards must be heavily subsidized to remain open. The reason for an investigation of the Indian shipbuilding industry would be to develop a better understanding of why it is so uncompetitive, and to project its future direction.
Many believe that India is on the threshold of establishing a more significant world presence; it has an outstanding system of higher education in technological areas, the population is hardworking, wide use of the English language supports international communication, and the country's location is at the center of major movement in economic and political change. The growing geo-political importance of the country has exacerbated the need for a better understanding of the country's industrial sectors, especially those that have a relationship with defense capabilities.
An overview of the economic history of the nation since Independence in 1947 is first presented. Next, there is a brief discussion of the maritime sector of the economy, followed by an evaluation of the nine major shipyards involved in new ship construction. Finally, conclusions are drawn as to the reasons for the industry's current condition, with projections as to its future.
11 September 2003
Europe's Leadership in Maritime Activities
I continue to marvel at the lack of recognition the USA shipbuilding market analysts give to the vitality and strength of the European shipbuilding industry. About five years ago I returned to the United States after a three-year assignment at Office of Naval Research's International Field Office in London. My responsibility was to monitor Europe's manufacturing sector, especially shipbuilding, and to support "building of bridges" with U.S. counterparts.
At the time of my assignment completion I prepared a final report that summarized the experience; one of the most significant observations was that "Europe is the leading international area for ONR's industrial science and technology focus in the area of ship production dynamics." I think that conclusion is still appropriate today.
Consider these facts:
1. Europe has about 45% of the world's commercial ship production dollar orders;
2. Market share is especially high--typically 60-90 percent--in high-value ship configurations like:
a. cruise ships
c. extra large container ships--over 8000TEU
d. small dry cargo ships--under 5000dwt
e. passenger ferries
f. large Ro-Ro--over 10500dwt
g. large offshore support vessels--over 3000dwt
h. large tugs--over100dwt
i. chemical tankers
3. Dominates list of "best business environment" locations--7 of top 10 are located in Western Europe;
4. Most integrated supplier network in the world;
5. UK dominates the world maritime financial market;
6. Largest concentration of international maritime consultants is found in Western Europe;
7. Continues to be the most supportive for international cooperation;
8. Leader in introduction of new design concepts, like:
a. Suspended electric drive
b. Cruise ship design
c. Laser welding
d. Super large container ships
e. Stainless steel military ships
f. Titanium submarines
g. Military ships built to commercial specifications
h. Robotic construction of large structures, like ships
i. Composite structures
j. Classification rules for military ships
k. The major short courses on ship design and marketing continue to be given in the UK, primarily by the Lloyd's organization
l. The development of the modularized weapon system concepts for surface combatants, like that employed by B+V with the MEKO destroyers.
I think, for openers, there should be a more focused effort to expand the linkups with the European shipyards, and maritime organizations. ONR, for example, should give the same attention to placing technical monitors for ship production into the London office as is found in Tokyo. The NSRP, as another example, should link-up with NATO navies, or at least the British Navy. The US Navy has continued to work closely with the British Navy, and, on occasion supported joint R&D efforts, the NSRP, since 1998, has not permitted any joint efforts with them [at least as far as I know]. I think a close working relationship should be emplaced with ALL of the NATO navies. We could learn much from the total acquisition processes that are being followed in those organizations.
Would appreciate any comments that others may wish to make, especially as it relates on how to increase cooperation with European organizations.